Alexander Hendrie

Senator Rob Portman(R-Ohio) has releaseda bipartisan retirement reform bill alongsideSenator Ben Cardin (D-Md). The ‘Retirement Security and Savings Act of 2019’ enacts sweeping, common sense reforms in order to advance the American retirement system into the21st century.

The legislation includes numerous reforms that strengthen 401(k) plans. These popular and important to American families because they allow individuals control over their own retirement savings.Contributions to 401(k)s are tax free and any gains accrued are also tax free. Additionally, most employers offer some sort of ‘matching contribution’ plan wherein the company will match, up to a point, whatever contributions a worker makes to their own 401 (k) account. This not only boosts savings, it also allows workers to more directly manage their own retirement plans.

Portman’s bill contains provisions dedicated to solving one of four goals -- offering relief to Americans who have saved too little for retirement, incentivizing and supporting small business retirement plans, promoting accessibility to retirement savings for low-income workers, and offering flexibility for current or near retirees.

Help for Workers who have Saved too Little:

Unfortunately, many Americans approach retirement age with insufficient savings. This bill contains a number of provisions that remove regulations that hamper late-term saving and make it easier for workers to contribute to retirement accounts later on in their careers.

The first of these provisions is an employer tax credit which is made available by automatically enrolling workers in ‘safe harbor’ plans at a rate of 6% of pay (on top of the current 3% of pay safe harbor). The bill also increases the ‘catch up’ contribution cap from $6,000 to $10,000 for people 60 years or older. Additionally, the plan allows employers to make matching contributions to retirement plans equal to the amount workers are paying towards their student loan debt.

Small Business Retirement Plan Incentives:

Small businesses are burdened by complex and overbearing IRS regulations which impact retirement plans for their workers. Portman’s bill simplifies these rules and makes it easier for small business employees to save for retirement.

The proposal increases the tax credit for new small business retirement plans form $500 to as much as $5,000. It also provides a tax credit for small businesses which offer more generous ‘safe harbor’ plans to their workers. On top of this, the bill also eliminates penalties for unintentionally violating complex IRS retirement plan rules as long as the company self corrects its mistakes.

Retirement Access for Low-Income Workers:

Low-income Americans often live paycheck to paycheck, making it difficult to save for retirement. This bill expands access to retirement for these workers by cutting taxes and simplifying retirement plans.

The plan lowers the income threshold for ‘Saver’s Credit’, expanding access to those who need it most. Additionally, Portman makes ‘Saver’s Credit’ directly refundable into retirement accounts with a new ‘government match’. The bill also expands 401 (k) eligibility to part-time workers who put in 500 - 1,000 hours for two years in a row.

Flexibility for Current Retirees:

Increased life expectancy along with the changing nature of work make it more desirable for many Americans to continue working later and contributing to their retirement accounts. Current regulations punish them for doing this. Portman’s bill allows workers to more fully control their own retirement.

It does this by first, gradually increasing the age for required minimum distributions to 72 by 2023 and 75 by 2030. It also exempts people with $100k or less in retirement savings from the required minimum distributions, allowing them to continue contributing to their retirement savings. Finally, the bill encourages the expansion of ‘QLAC’s’ - retirement plans which pay out annually to retirees who live past their life expectancy.

The Retirement Security and Savings Act of 2019 makes great, long-needed reforms to the American retirement system. It makes saving much easier for low-income workers, and it incentivizes the creation of new retirement plans for small businesses. Ultimately, this is a bipartisan, common sense bill which provides more financial control to workers and small businesses. Several members of the Senate Finance Committee have expressed support for the bill, but the rest of Congress needs to come around and support these reforms to serve the American people.

Later this week, the House of Representatives is set to take up H.R. 3798, the “Save American Workers Act,” sponsored by Congresswoman Jackie Walorski (R-IN).

All members of Congress should support the Save American Workers Act. This legislation, which reduces taxes by $58.5 billion in the next decade, offers important relief from Obamacare taxes by freeing small businesses from unnecessary, job killing taxes and mandates.

The legislation provides retroactive relief from Obamacare’s employer mandate between December 31, 2014 and January 1, 2019 and also redefines an employee as an individual working 40 hours per week.

Under current law, the employer mandate tax penalty forces employers to pay a $2,000 tax per full time employee (defined as 30 hours per week) if they do not offer “qualifying” health coverage as defined by the federal government. This mandate imposes extensive costs on businesses, resulting in part-time workers being given less work. A study by the National Bureau of Economic Research estimates that as many as 250,000 small business jobs may have been eliminated by the mandate.

H.R. 3798 also pauses the Cadillac tax on employer provided health insurance for an additional year, so that the tax will not hit until December 31, 2022.

Like the employer mandate, the Cadillac Tax is devastating to employers. Under current law, the Cadillac Tax is a 40 percent excise tax on employer provided health insurance plans exceeding a value of $10,200 for individuals and $27,500 for families. This threshold includes the value of a healthcare plan, but also includes payments to Health Savings Accounts and Flexible Spending Accounts.

When the Cadillac tax was scheduled to go into effect in 2018, the Kaiser Family Foundation estimated it would hit 26 percent of employer provided plans in two years and 42 percent of employer provided plans in ten years.

Finally, the Save American Workers Act repeals the Obamacare tanning tax. This discriminatory tax is imposed directly on tanning businesses in the form of a 10 percent excise tax and has wiped out an estimated 10,000 tanning salons, many owned by women.

This legislation represents another important step toward full repeal of all one trillion dollars in Obamacare taxes. The Republican controlled Congress has already made impressive progress toward this goal:

Late last year, lawmakers repealed the Obamacare individual mandate tax penalty, which was one of the most regressive taxes in the code. This tax hit 6.6 million American families and individuals. 79 percent of those paying the mandate made less than $50,000, and 37 percent of those paying the mandate made less than $25,000.

Lawmakers have also passed legislation that offered incremental relief from the medical device tax and delay of the health insurance tax. The 2.3 percent medical device tax is imposed on roughly 6,500 medical device manufacturers, the majority of which are small businesses. Half of the tax is paid by those earning less than $50,000 a year and it will increase premiums by $5,000 per family over the next decade according to research by the American Action Forum. As many as 1.7 million small businesses and 23 million families that receive coverage through their employer are impacted by this tax.

The House has passed legislation to dramatically expand HSAs. HSAs are by 25 million American families and individuals in combination with a high deductible health plan. This package of legislation doubled the contribution limit for an HSA from $3,450 to $6,650 for an individual and $6,900 to $13,300 for a family, expanded access to HSAs by allowing working seniors enrolled in Medicare Part A to contribute to an HSA, allowed individuals with a bronze or catastrophic health plan to be eligible for an HSA, and repealed the ObamaCare restriction on using an HSA to purchase over-the-counter medications.

The Save American Workers Act represents another step toward achieving free market healthcare reform. Members of Congress should vote yes on this important legislation.

Since passage of the Tax Cuts and Jobs Act, European bureaucrats have taken aim at the success of the law, threatened to designate the U.S. a tax haven, and have even proposed a global minimum tax on digital innovation aimed at iconic American businesses.

Based on these acts, it has become clear that the U.S. needs an Ambassador to the Organisation for Economic Co-Operation and Development (OECD) who is well versed in the TCJA – specifically the international provisions of the law – and can clearly and credibly advocated for and defend the pro-growth policies that your administration has enacted.

In a letter to President Donald Trump, ATR urged the nomination of an ambassador to the OECD that will defend American competitiveness and advocate for pro-growth policies.

I urge you to nominate an ambassador to the Organisation for Economic Co-operation and Development (OECD). It is crucial that your administration has a representative at the OECD that can defend American competitiveness and advocate for pro-growth policies.

Under your administration, the economy is surging thanks to deregulation and the passage of tax reform. The economy grew 4 percent in the second quarter of 2018 and has averaged over 3 percent since the start of your presidency. Job openings are at a record high, unemployment is at a 17 year low, and American families are seeing increased take-home pay.

Since passage of tax reform, the U.S. has even been named the most competitive economy in the world, according to the IMD World Competitiveness Center.

Unfortunately, this economic resurgence is being threatened by European bureaucrats that are taking aim at the success of tax reform.

High-tax, big government European nations have taken aim at the tax reform law and have demanded the OECD review key international provisions as Harmful Tax Practices.

Some countries have even gone as far as to suggest that the OECD designate the U.S. a tax haven, and it is expected that the EU will launch a legal challenge to the tax law in the World Trade Organization.

EU leaders have also called for a discriminatory, global minimum tax on digital innovation, which would be imposed on the digital revenue of tech companies, based on the concern from Europe that companies are paying too little.

This tax is a thinly veiled attempt to target US businesses, as it is predominately aimed at iconic American companies out of Silicon Valley.

Ironically, European nations are trying to undermine US tax law that seeks to clarify the tax base and the very problems that the EU digital tax purportedly seeks to address.

The U.S. needs an Ambassador to the OECD who is well versed in the TCJA – specifically the international provisions of the law – and can clearly and credibly advocated for and defend the pro-growth policies that your administration has enacted.

The IRS will no longer require that certain non-profits submit Schedule B forms containing the personal taxpayer data of their donors, according to a release by the Treasury Department.

By ending this requirement, the Trump administration has delivered a major victory to advocates of free speech and for efforts to hold the IRS accountable to taxpayers.

As noted by Treasury Secretary Steven Mnuchin, the decision in no way limits transparency in the political process:

“…It is important to emphasize that this change will in no way limit transparency. The same information about tax-exempt organizations that was previously available to the public will continue to be available, while private taxpayer information will be better protected. The IRS’s new policy for certain tax-exempt organizations will make our tax system simpler and less susceptible to abuse.”

Fifty years ago, Congress required the IRS to collect personal information from donors that give to non-profits such as section 501(c)(3) organizations. This information, which includes the names and addresses of donors, is submitted to the IRS on the Schedule B form. The agency later extended this requirement to all other tax-exempt organizations including 501(c)(4)s and 501(c)(6)s.

Bizarrely, schedule B forms are not used for any official purpose – the IRS is actually prohibited from sharing this sensitive information. Instead of serving a legitimate purpose, the disclosure requirement creates needlessly compliance costs on both non-profits and the IRS.

More alarmingly, the form has given unelected bureaucrats a tool to chill political speech in recent years.

For instance, under the Obama administration there were several cases where agency officials leaked the sensitive information contained on Schedule B forms for political purposes, like when the schedule B of the National Organization for Marriage was leaked.

In fact, a 2016 report by the Government Accountability Office warned that the IRS may still be unfairly targeting Americans based on political beliefs. As the report noted, serious internal control flaws mean the IRS may still be unfairly selecting Americans for an audit “based on an organization’s religious, educational, political, or other views.”

While ending the collection of Schedule B forms for some non-profits is a strong step in the right direction, Congress should follow the lead of the Trump administration by removing this disclosure requirement for ALL non-profits.

They can accomplish this goal immediately by passing H.R. 4916, the Preventing IRS Abuse and Protecting Free Speech Act, introduced by Congressman Peter Roskam (R-Ill.), which would ensure that government bureaucrats could no longer use the Schedule B disclosure requirements to target political free speech ever again.

To be sure, the IRS decision to end the collection of sensitive taxpayer data for some non-profits is a huge victory for free speech and will stop future administrations from targeting these organizations.

Now, it is now incumbent on Congress to follow the lead of the administration and ensure that the prohibition on collecting Schedule B forms is expanded to all non-profits and codified in law.

Created in 1992, the 340B safety net drug program was originally designed to provide uninsured and low-income Americans with access to life-saving and life improving prescription medicines. Unfortunately, the program is no longer working as intended and is in dire need of reform and oversight.

340B requires manufacturers to provide outpatient prescription drugs to healthcare organizations (typically hospitals, clinics, and other healthcare centers) at a significant discount. This discount can be as high as 50 percent of the average wholesale price and manufacturers are required to provide this discount as a condition of remaining eligible for federal funds from other entitlement programs, such as Medicare and Medicaid.

Over the last 25 years, the nation’s health care system has changed significantly. Congress has passed or expanded numerous laws designed to provide care to lower income individuals and expand access to prescription medicines.

Despite the changing landscape of healthcare, the safety net drug program remains the same as when it was first passed in 1992. Today, it is clear that the program has been operating without necessary safeguards and even may be creating perverse incentives that drive up costs.

President Trump has wisely called for oversight and reform over the 340B safety net drug. Lawmakers should heed his call and ensure that 340B is operating as intended.

Since its inception, the 340B program has operated with little to no oversight. This has included a complete lack of accountability over how savings are distributed to patients and an absence of any reporting requirements.

At the same time, the program has expanded considerably since it was first created. In 2005, just 583 hospitals participated in the program. Today, 12,000 hospitals and non-hospital clinics participate.

This combination of rapid expansion and no oversight has created structural problems and it remains unclear whether patients are seeing any benefit from the discounts provided by the program.

One of the biggest problems centers around hospitals that qualify for 340B based on the DSH (Disproportionate Share Hospital) program, which is designed to compensate those that serve the truly needy.

Most newly participating hospitals are qualifying for 340B based on DSH and these hospitals appear to be the worst offenders of 340B abuse. In 2012, the government initiated its first audit over 340B. Since then, government data has found that two-thirds of DSH hospitals have violated conditions to be eligible for the program.

Because of the absence of oversight, it is unclear if 340B is working as intended. 340B imposes a price control on prescription medicines in order to provide the truly needy with medicines. This price control comes at a cost – everyone else has to pay more. It is unclear whether the savings are being passed along to patients or being absorbed by middlemen.

In fact, a report by the Government Accountability Office (GAO) found that per beneficiary drug expenditures were higher at 340B hospitals than non-340B hospitals, even after accounting for medical conditions.

Unfortunately, there is no incentive for hospitals to provide better quality care or to lower costs. Perversely, in many cases, there is actually an incentive to prescribe more expensive medicines.

One of the next steps lawmakers can take is passing H.R. 4710, the 340B PAUSE (Protecting Access for the Underserved and Safety-net Entities) Act, which would implement reporting and regulation requirements in order to ensure that program is working for the truly needy.

The legislation imposes a temporary moratorium on new DSH hospitals and requires commonsense data collection including a breakdown of patient mix, charitable care, 340B revenue and contracts with state or local governments that qualify hospitals for 340B.

Lawmakers should also oppose proposals that will perpetuate the abuse and unchecked growth of the 340B program. For instance, H.R. 6071, the “Stretching Entity Resources for Vulnerable (SERV) Communities Act” should be rejected, as it would allow even more hospitals to benefit from out-of-control government mandated price controls and subsidies.

This proposal would allow hospitals to more easily be able to take advantage of funding, due to the lack of requirements for individual patients to receive the discounts and the restrictions on patient definition. This proposal would only make the safety net drug program more unaccountable.

Reform to the 340B safety net drug program is clearly needed. Congress should follow President Trump’s call to ensure the program is working as intended and that waste and abuse is curtailed.

Americans for Tax Reform today led a coalition of 28 groups in support of a House Concurrent Resolution opposing a carbon tax.

The resolution was introduced today by Majority Whip Steve Scalise (R-La.) and Congressman David McKinley (R-W.V.). As the group notes, a carbon tax would lead to lower income and fewer jobs for American families, and would reverse the many successes of tax reform.

The undersigned organizations urge you to support the concurrent resolution, introduced by Majority Whip Steve Scalise (R-La.) and Congressman David McKinley (R-W.V.), which expresses the sense of the Congress that a carbon tax would be detrimental to the U.S. economy.

We oppose any carbon tax. We oppose a carbon tax because it would lead to less income and fewer jobs for American families.

For example, a 2014 Heritage Foundation report found that a $37 per ton carbon tax would lead to a loss of more than $2.5 trillion in aggregate gross domestic product by 2030. That is more than $21,000 in income loss per family.

In addition, a carbon tax would cost over 500,000 jobs in manufacturing and more than one million jobs by 2030. According to a 2013 CBO report, a carbon tax is highly regressive.

After President Trump signed the Tax Cuts and Jobs Act into law on December 22, 2017, more than 90 percent of wage earners have had higher take-home pay.

At least 500 companies of all sizes have already announced special bonuses, pay raises, 401(k) match increases, tuition assistance, new training programs and other benefits for workers.

This week, the Senate Health, Education, Labor and Pensions (HELP) Committee will hold a hearing on the 340B prescription drug program under the leadership of Chairman Lamar Alexander (R-TN). This hearing is an important step in determining what reforms are needed to ensure the program remains efficient and effective.

340B was originally created in 1992 to ensure uninsured and low-income Americans would have access to prescription drugs. The program requires manufacturers to provide outpatient prescription drugs to healthcare organizations (typically hospitals, clinics, and other healthcare centers) at a significant discount. This discount can be as high as 50 percent of the average wholesale price and manufacturers are required to provide this discount as a condition of remaining eligible for federal funds from entitlement programs such as Medicare and Medicaid.

The program has expanded considerably since it was first created. In 2005, just 583 hospitals participated in the program. Today, 12,000 participate. This rapid expansion has resulted in structural problems with 340B and it remains unclear whether patients are benefiting from the discounts provided in the program.

Instead, the program appears to be creating perverse incentives that eliminate the need for efficiency and leave insurers and taxpayers with higher costs.

For instance, a report by the Government Accountability Office (GAO) found that per beneficiary drug expenditures were at higher at 340B hospitals than non-340B hospitals even after accounting for medical conditions.

In addition, as noted in a report by the House Energy and Commerce Committee, there is a lack of accountability regarding how any savings are distributed to patients including a lack of any reporting requirements.

Clearly, the 340B program suffers from a lack of oversight and efficiency and is no longer working as intended. Chairman Alexander and the HELP Committee should be commended for exploring the 340B program and examining the need for reforms that will ensure the program is working as intended.

Senate Democrats are proposing one trillion dollars in higher taxes over the next ten years including a nearly $600 billion income tax increase, a business tax increase, an increase to the death tax, and a capital gains tax increase.

The Senate Democrat plan calls for raising the income tax rate to 39.6 percent and increasing the Alternative Minimum Tax (AMT) to pre TCJA levels, meaning millions of Americans would have to again pay this tax. According to 2015 IRS data, over 900,000 taxpayers in California and 500,000 taxpayers in New York paid the AMT prior to passage of the TCJA, which dramatically increased the threshold at which this tax applied.

Democrats also propose an $83 billion increase to the death tax. This tax increase would disproportionately fall on family-owned businesses and suppress jobs and wages. 76 percent of Americans support full, permanent repeal of the Death Tax, according to a poll by NPR.

In addition, the proposal calls for increasing the corporate tax to 25 percent. Including state corporate tax rates, this would cause the U.S. rate to rise to 29 percent, above the worldwide average rate of 23 percent and the industrial average of 24 percent.

Finally, Democrats propose a tax increase on carried interest capital gains. A carried interest capital gains tax increase would reduce investment and savings and damage economic growth at a time when the economy is beginning to grow at 3 percent or higher.

Democrats have claimed that the Tax Cuts and Jobs Act (TCJA) passed by Republicans in December was irresponsible because it would increase the deficit. Now, they are proposing to undo these tax cuts to finance more wasteful spending, proving they are not truly concerned about the deficit.

Regardless, tax reform is working. The law has resulted in 90 percent of Americans receiving more money in their paycheck and has resulted in at least four million workers receiving bonuses. Millions more have received salary increases, increased retirement benefits, and lower utility costs. The Senate Democrat tax hike proposal would wipe out these benefits.

I write to urge you to ultimately reject the proposed effort to raise tariffs on aluminum and steel. Tariffs are taxes. Increasing them will, on net, hurt American manufacturing, its workers and their families, while undermining your administration’s success with its landmark tax reform.

We support your goal of helping American businesses and workers through better trade deals. However, we have strong concerns that imposing global tariffs will be counterproductive to this aim.

In the case of the proposed steel and aluminum tariffs, while there will be some winners – in this case the domestic industries that manufacture steel and aluminum – there will be far more losers. Every industry that uses these products as an input will see higher prices, leading to increased costs for consumers, and lower wages and fewer jobs for American workers. Ironically, countries without these tariffs will be advantaged over the U.S.

New tariffs on these two metals will therefore have a net negative effect on American competitiveness and manufacturing. According to a study by Trade Partnership, imposing higher tariffs on steel and aluminum would create 33,464 jobs in domestic production, but cost 179,334 jobs through adverse negative economic effects.

We must avoid starting a civil war within the U.S. economy by picking winners and losers among American workers and businesses. Consumers will be clear losers as they will see higher prices on everyday products like cars, soda, and beer. But the real trade war we have to fear is the war between different sectors of the U.S. economy.

The U.S. government has tried increasing steel tariffs before, and the effort was counterproductive. In 2002, President George W. Bush increased tariffs on steel, a move which cost as many as 200,000 American jobs. This move also led to a trade war, with the European Union targeting the Florida orange industry in retaliation. Today, the EU is threatening American automobiles and distilled spirits, among other industries.

Your administration has taken strong strides to make America competitive. The tax reform bill passed in December created a competitive territorial system of taxation and lowered the corporate tax rate to 21 percent. Your dramatic tax reform will have major effects on manufacturing and U.S. trade, but will take some time to bring about the realignment your Administration is targeting.

Before tax reform, we had the highest rate in the developed world and were one of six countries in the 35-member OECD with a worldwide system. This encouraged investment outside the U.S., suppressed the creation of new jobs and American manufacturing, and lowered wages. The old system caused more than $1.7 trillion in business assets to flow outside the country between 2004 and 2016, according to one study. Your implementation of a globally competitive tax system will reverse these trends. But we must not allow these gains to be undermined by tariffs.

Tariffs also threaten to undercut the increased wages and greater take-home coming from tax reform. Ninety percent of Americans are seeing more money in their paychecks, while at least four million workers are seeing higher salaries or bonuses. Millions more are seeing increased wages, increased retirement benefits, and lower utility costs. We cannot risk these gains being undermined through higher tariffs.

We commend you for working toward better trade deals for American workers. Imposing tariffs puts this progress at risk. We believe that higher tariffs will result in far more American losers than winners and will hurt the creation of new jobs, higher wages, and, critically, undermine the success of tax reform.